The government made a raft of structural changes to offer relief to the embattled telecom industry and announced a four-year moratorium on payment of adjusted gross revenue and spectrum dues to help companies, in particular Vodafone Idea, to manage cash flows. The moratorium comes with a Marginal Cost of Funds based Lending Rate (MCLR) + 2 percent, making it revenue-neutral for the government.
Gearing up for the biggest auction of mobile phone radiowaves in the country, government cleared sale of spectrum in seven frequencies estimated to be worth about Rs 5.6 lakh crore
Clearly we'd asked for reductions in overall financial impacts viz-a-viz SUC charge, says Rajan Mathews, Director General, Cellular Operators Association of India (COAI).
Reliance had won spectrum in the 2010 auctions before the government had adopted the new spectrum fee regime for auctions starting 2011. Fee revision is allowed only on auctions post 2011.
Presently, government allocates spectrum to telecom firms on the basis of auction. Once the trading is permitted, the companies will be able to sell spectrum to the other telecom license holders.
Trai, in its recommendations, says there will be no reservation of spectrum for the renewal of Licencees in the 900 megahertz (MHz) or the 1,800 MHz band. No priority will be accorded to these Licencees in the bidding process and all bidders should be treated alike.